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After Elon Musk puts $44 bn Twitter deal on hold, stocks tumble

The implied probability of the deal closing at the agreed price fell below 50 percent for the first time on Tuesday, when Twitter shares dropped below $46.75.

FPJ Web Desk | Updated on: Friday, May 13, 2022, 04:20 PM IST

Shares of Twitter fell 17.7 percent to $37.10 in premarket trading, their lowest level since Musk disclosed his stake in the company in early April
/Representative image | File pic
Shares of Twitter fell 17.7 percent to $37.10 in premarket trading, their lowest level since Musk disclosed his stake in the company in early April /Representative image | File pic
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After Tesla CEO Elon Musk tweeted about the $44 billion Twitter deal being put on hold, the shares of Twitter fell in pre-market trading.

Shares of the social media company fell 17.7 percent to $37.10 in premarket trading, their lowest level since Musk disclosed his stake in the company in early April and subsequently made a "best and final" offer to take it private for $54.20 per share, Reuters said.

The implied probability of the deal closing at the agreed price fell below 50 percent for the first time on Tuesday, when Twitter shares dropped below $46.75.

Twitter had earlier this month estimated that false or spam accounts represented fewer than 5% of its monetizable daily active users during the first quarter when it recorded 229 million users who were served to advertise. "Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users," Musk tweeted on Friday.

Tesla, Twitter shares tumble this week

Shares of Tesla and Twitter have tumbled this week as investors deal with the fallout and potential legal issues surrounding Tesla CEO Elon Musk and his $44 billion bid to buy the social media platform.

Of the two, Musk's electric vehicle company has fared worse, with its stock down almost 16 percent so far this week to $728. Twitter shares fell 9.5 percent for the week, closing Thursday at $45.08. Both stocks have taken a bigger hit than the S&P 500, which is down 4.7 percent for the week.

Along with malaise in the broader markets, investors have had to weigh legal troubles for Musk, as well as the possibility that his acquisition of Twitter could be a distraction from running the world's most valuable automaker. The Wall Street Journal reported Wednesday that US securities regulators are investigating Musk's tardy disclosure that he had bought more than 5 percent of Twitter shares. Musk now owns more than 9% of the San Francisco company. The SEC wouldn't comment, and a message was left for Musk's lawyer.

(With inputs from Reuters)

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Published on: Friday, May 13, 2022, 04:13 PM IST